US claims success as Iranian currency plummets

The United States says the plunging Iranian currency is evidence that international pressure over its nuclear program is succeeding.

Iran's currency weakened to 34,700 to the US dollar by the end of Monday's trading, a drop of 17 per cent compared to the previous day's rate of 29,600.

At the end of last year, the rial was worth 13,000 to the dollar.

Iran is suffering the effects of tough economic sanctions curbing access to its reduced oil exports, as the West seeks to force the country to rein in its nuclear program.

State Department spokeswoman Victoria Nuland says Iran is increasingly cut off from the global financial system and significant amounts of Iranian oil are coming off the market.

"The currency is plummeting and firms all over the world are refusing to do business with Iranian companies," she said.

"These are the most punishing sanctions we have ever been able to amass as an international community and they are very important for trying to get Iran's attention on the important denuclearisation work."

Officials said after talks at the United Nations last week that the European Union and US are now set to toughen the sanctions while seeking to hold back Israel from a military strike.

The European Union will be first to step up sanctions as part of the international campaign of pressure, alongside increasingly frustrating efforts to negotiate a halt to Iran's uranium enrichment.

EU foreign ministers are to meet in Luxembourg on October 15 to discuss the measures.